The Trump administration announced Friday that it would lift tariffs on foreign products such as beef, tomatoes, bananas and coffee to ease some of the price pressures consumers have faced since the global tariffs took effect.
The exemptions, which took effect Thursday, applied to certain “reciprocal” tariffs that President Trump announced in April on other countries' exports. They are undoing one of the president's most important actions: the sweeping tariffs that he has suddenly suspended, raised and lowered in recent months, causing chaos for trading partners and international companies.
The White House said the tariffs were no longer necessary given the significant progress it has made in its trade negotiations, including more than a dozen “framework agreements,” final trade agreements and investment agreements. The United States announced this week that it had reached agreements with Switzerland, Argentina, El Salvador, Guatemala and Uruguay that would open those markets to U.S. business.
But the moves also appear to be motivated by increasing concerns about consumer prices inside and outside the White House. Although Mr. Trump campaigned on lowering food prices, persistently high inflation has dented his approval ratings, and concerns about affordability helped Democrats win elections nationwide last week.
Asked Friday whether he would make further changes to his tariffs, Trump said: “I don't think that will be necessary. We just made a small cut on some foods like coffee.”
In recent months, government officials have publicly discussed the idea of exempting goods that don't have major domestic U.S. producers, such as coffee or bananas, from the tax for countries that have signed trade agreements with the United States. However, many of the exemptions announced Friday evening would apply to all “reciprocal tariffs” imposed against foreign countries, not just those that have signed trade agreements. The contents also appeared to be larger than expected, including some US-made goods such as bread, beef and orange juice.
Some analysts said the government's move was a tacit admission that the tariffs had pushed up prices in the first place – a key idea among economists that the government has often disputed or rejected.
“Wait. If reducing tariffs lowers prices, what impact does increasing tariffs have on prices?” Erica York, vice president of the Tax Foundation, which has compiled estimates of the cost to consumers of the tariffs, wrote on social media.
“President Trump is finally admitting what we have always known: His tariffs are raising prices for the American people,” said Rep. Donald S. Beyer Jr., Democrat of Virginia.
Government officials, including Commerce Secretary Howard Lutnick, had in recent days advocated for larger exemptions to curb food inflation. But not all administration officials were convinced that it was wise to create such sweeping carve-outs.
By providing relief for countries that have made concessions in trade deals and those that have not, the exemptions could anger some trading partners. Tariff cuts could also anger domestic producers who are key bases for Mr. Trump, including ranchers and tomato and orange growers in Florida.
Mr. Trump clashed with ranchers in recent weeks and suggested increasing imports to drive down beef prices. Ranchers said the idea contradicts the president's “America First” philosophy.
The American Soybean Association released a statement thanking Mr. Trump for exempting fertilizers for soybean production. Other sectors protested against being removed from the exemption list.
The National Association of Manufacturers said in a statement earlier Friday that inputs and machinery for American factories should not be subject to tariffs. After the Trump administration's announcement, Chris Swonger, chief executive of the Distilled Spirits Council, said the exclusion of European and British spirits represented “another blow to the U.S. hospitality industry.”
Spirits like Scotch, cognac and Irish whiskey “are value-added agricultural products that cannot be produced in the United States,” he said.
All of the president's “reciprocal” tariffs on foreign nations are at risk in a Supreme Court case. Officials are waiting to see whether the court will rule that Mr. Trump exceeded his legal authority in imposing those tariffs and strike them down. The government has said it has other options for collecting taxes in this case.
Tariffs, along with other forces, have caused food prices to rise slightly in recent months. Costs have risen more sharply for some products, such as beef and coffee, whose prices have risen by almost 19 percent this year. This is partly due to the bad weather, but tariffs of 50 percent on imports from Brazil and 20 percent on goods from Vietnam, the major coffee growers, have added to the increase.
US inflation remained somewhat elevated and has risen again in recent months, despite Federal Reverse efforts to bring it down. After a rapid slowdown in monthly employment growth, the central bank recently increased its focus on maintaining the health of the labor market.
The Trump administration said tariffs would boost U.S. investment and manufacturing and create jobs. But many economists say the tariffs have contributed to higher prices and slower economic growth by raising costs for U.S. companies.
Tariffs appear to have had a somewhat muted impact on goods prices this year as companies were reluctant to pass on the costs to their customers. However, in recent months, more of the tariffs have been passed on to consumers. Goods inflation is rising, a change from last year, and prices for goods subject to tariffs have risen significantly faster than goods not subject to duties.
Karim Azzaoui, who represents a hazelnut and cashew importer called Balsu USA and is chief executive of the Association of Food Industries, said some goods have risen so much in price that they have become unaffordable for lower-income consumers. One example is olive oil, which is becoming increasingly popular in the United States due to its health benefits.
“Now that global prices are falling this year, we tend to see tariffs keeping prices here artificially high,” Mr. Azzaoui said. “At the food level, we have not seen a drop in prices because an American who buys olive oil to improve his diet is still priced out of the market.”
Lydia DePillis, Maggie Haberman and Tyler Pager contributed reporting.